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Dive Brief:

After nearly a year of contentious regulatory proceedings, Nevada utility regulators today unanimously ruled to approve a deal between NV Energy, SolarCity and regulatory staff to allow rooftop solar customers to retain the original retail rate net metering that was eliminated last year in a controversial decision.

Under the terms of the settlement, which was approved mostly intact, 32,000 rooftop solar customers will be grandfathered in under the original retail net metering rates over a period of 20 years. The settlement applies to customers who applied or installed a rooftop solar system before Dec. 31, 2015.

The agreement was tweaked to approve a billing period starting on Dec. 1, 2015 and establish that it will end on Nov. 30, 2036.

Dive Insight:

The Nevada PUC’s decision to reduce net metering rates at the end of last year set off months of regulatory and legal challenges.

In their decision, regulators reduced net metering incentives for both existing and future solar customers — and made the unprecedented decision not to “grandfather” existing solar customers into the new rate structure, the first time state regulators in any U.S. net metering debate decided not to do so. The new rate structure lowered the net metering credit to $0.09/kWh from $0.11/kWh, with the credit eventually declining to $0.026/kWh by 2020. The decision also created a separate rate class for solar customers and raised fixed charges for them while reducing volumetric rates.

Nevada solar groups and the Nevada Attorney General’s Bureau of Consumer Protection challenged the ruling, saying it violated the contract clause of the Constitution because many rooftop solar contracts were predicated on retail rate net metering.

Earlier this week, a Nevada court sided with the solar interests, finding that the PUC’s order was a “denial of fairness and due process through inadequate notice.” But the ruling itself is now likely moot, due to the deal between NV Energy, SolarCity and regulatory staff approved on Friday with the support of each commissioner.NV Energy maintains that it did not request the exclusion of a grandfathering provision in the original order, and filed an earlier proposal to include one in February, only to be rebuked by regulators.

But the same week, NV Energy filed a revised grandfathering proposal with regulators. Shortly after that, the state's Bureau of Consumer Protection withdrew its request for a hearing on the matter. Sandoval had been critical of the net metering decision and convened New Energy Task Force to resolve net metering issues earlier this year.

The solar industry and NV Energy both applauded the latest decision and Sandoval’s engagement on solar issues.

“We thank Gov. Sandoval for his leadership and support and appreciate the steps taken by the PUCN to stabilize solar policy,” the Solar Energy Industries Association, a national trade group, said in a statement. “We now must put policies in place that support new solar customers in Nevada so that solar jobs can once again increase, and the robust economic activity associated with solar development can resume.”

“The grandfathering tariff NV Energy filed in July 2016 was the most efficient and timely way to implement Governor Sandoval’s New Energy Industry Taskforce recommendation to grandfather the existing net metering customers in question," Paul Caudill, NV Energy President and CEO, said in a statement. "The Public Utilities Commission of Nevada’s decision today is fair for this set of existing net metering customers, and at the same time reinforces the clear path forward they established in February 2016 for those considering rooftop solar in the future."